Question

Of the following, the most difficult account for management to intentionally misstate is:

a. Income Taxes Payable.
b. Cash.
c. Securities.
d. Prepaid Expenses.

Answer 1

The most difficult account for management to intentionally misstate is (Option b) Cash, as it is highly scrutinized and the balance can be easily verified through bank statements and reconciliations.

Step-by-step explanation:

Of the following, the most difficult account for management to intentionally misstate is b. Cash.

Cash is an account that is highly scrutinized and easily verifiable through bank reconciliations and other auditing procedures. Other accounts, such as Income Taxes Payable, Securities, and Prepaid Expenses, may involve more complex judgments and estimations, which can be manipulated with more ease. Cash, on the other hand, has a clear and definitive balance that can be readily confirmed with bank statements and thus provides less opportunity for intentional misstatement without detection.